ABANDONMENT: In Food Perfect, Inc. v. United Fire and Casualty Company, 2012-2492 (La. 1/18/13), – So.3d-, the Louisiana Supreme Court held that informal settlement discussions do not qualify as a waiver of abandonment. The undisputed facts of the case indicated that the plaintiff’s last formal activity in the suit occurred on June 4, 2008. On April 13, 2012, the defendant filed a motion to dismiss and argued that the suit was abandoned because the plaintiff did not take any “steps” in prosecution of the case for more than three years.

The Court recognized two exceptions to abandonment- (1) when the failure to prosecute is caused by circumstances beyond the plaintiff’s control; and, (2) when the defendant waives the right to assert abandonment. After June 4, 2008, the plaintiff and the defendant occasionally engaged in informal settlement discussions. The trial court found that these informal discussions amounted to the defendant’s waiver of abandonment. The Court of Appeal upheld this finding. However, the Supreme Court reversed, dismissed the case and held that informal settlement discussions could not be construed a waiver of abandonment.

SLIP AND FALL: In McClelland v. City of Shreveport, 47,570 (La. App. 2 Cir. 1/16/13), – So.3d -, the plaintiff filed suit after she tripped on a sidewalk while walking her dogs. The court found that the sidewalk presented an unreasonable risk of harm even though the plaintiff was familiar with its condition. A city official acknowledged that the cracks in the sidewalk could have presented a danger to pedestrians and justified the expense undertaken to repair the area shortly after the incident. Corroborative testimony revealed that the area had been a problem for “many years.” Based upon this evidence, the Second Circuit affirmed the trial court’s ruling which allocated 50% fault to the city and 50% fault to the plaintiff.

Many Louisiana cases have rejected liability when presented with proof that a defect was obvious and fully known to a plaintiff. Perhaps implicit in the McClelland court’s decision to uphold the finding of liability on the part of the city, despite the plaintiff’s awareness of the defect, is the notion that the defect presented a hazard even when known to the plaintiff. In McClelland, the evidence showed that the entire sidewalk area was defective and that the plaintiff was trying to avoid the “worst cracks” when the accident occurred.

INSURANCE: In Daniels v. Imperial Fire and Cas. Ins. Co., 47,572 (La. App. 2 Cir. 1/16/13), – So.3d -, the plaintiffs were passengers in a car struck by an unknown driver. Following the accident, they sought recovery under the driver’s uninsured motorist (“UM”) policy. The insurer denied the claim on grounds that the plaintiffs were not “insured persons” under the policy. The plaintiffs alleged that the insurer’s denial of their claims was arbitrary, capricious or without probable cause and petitioned for penalties and attorney’s fees. The trial court found that coverage was present but rejected the plaintiffs’ claims for penalties and attorney’s fees.

On appeal, the appellate court recognized the holding in the Louisiana Supreme Court’s decision of Bernard v. Ellis, 2011-2377 (La. 7/8/12), – So.3d – that permissive passengers of a vehicle are insureds who are entitled to UM coverage and that an insurer’s denial of UM payments to permissive passengers would qualify as bad faith. However, Bernard had not been decided at the time the Daniels matter was before the trial court. Moreover, appellate courts had previously offered inconsistent rulings on this issue. Given the legal uncertainty present at the time, the insurer had a legitimate reason to deny the plaintiffs’ claim. Therefore, the insurer’s actions were not arbitrary, capricious or without probable cause.